Weekly digest

The AR blogging community has been busy this week:

• Analyst Equity: Duncan comments back on his ex. Colleagues in Ovum revenue to top 35 million again, apparently doing well and hiring within Yankee ranks: Roger Entner, Chris Lewis and XJ Wang are the latest transfers.  Our opinion is that Ovum prefers growing organically (question to Duncan: does low power distance ratio goes well with risk adverse?) and could do more to exploit the gap left by META Group, especially in the consulting segment. But yes, they’re nice lads…


• Talking about Yankee, Tekrati reports it has been purchased Alta Communications -a private equity firm- from Decision Matrix LLC (who in turn acquired it from The Monitor Clipper Group?).  The story on InformationWeek is (marginally) more informative than the press release posted as such on Tekrati.  Our prediction for more consolidation in 2005 is confirmed.


• David Rossiter reports another defection from Yankee in the person of Euan Davis but to Forrester services team this time: [Analyst Insight:] Arrival at Forrester.


• Joe Guralnick is asking what the Borg CEO is up to: read [Gartner Watch:] Does Gene Hall has a future

    

Is Gartner going Symposium frenzy? Part 2/2

Following our previous post on the Gartner Cannes Fall Symposium (Is Gartner going Symposium frenzy? Part 1/2) on the content side this time, we would start with agreeing with Joe that there was no real news (read Does Symposium have a future?) and he may have a point as the Borg picking up noise and no real trend (read also Does size implies relevance?). His analysis leads him to predict Symposium the same fate as Comdex.

Gartner’s CEO, Gene Hall introduced the event. He evidently got himself a presentation coach after the nervous and wooden spring performance but was still reading from the prompter. We advise the Borg to purchase a W magic jacket and matching earpiece. The opening keynote was rehearsed OTT, long and not bringing much to the theme (Faster ROI) launched by Gene in the introduction. We suggest the Borg to make an effort to actually follow-through the theme during the whole event and to apply Fast ROI to their vendor clients, for instance by making sure the EXP crowd actually sets foot on the show-floor…

As for the rest of the content, it was not very different from the Barcelona gig and they obviously kept some in store for the Amsterdam Data Centre Summit.

Is Gartner going Symposium frenzy? Part 1/2

Starting with the good news, the event production team as usual did a top job (those guys can really run a large show neatly) and the James Bond party at the Carlton hotel was impressive, with its ice scultpted artefacts, a casino room and even oysters… Quite an improvement over previous years, although some say Florence was still the nicest one. We wonder how the Orlando do was in comparison? Miller Lite, chicken wings and Mickey Mouse till 7:30 pm? Just in case you were wondering where your platinum sponsorship package went, we scientifically guesstimated the party budget to $200+ a head (.2 probability).

The estimate we have on attendees numbers vary (we won’t get the final numbers until the event sales team has finished massaging them) between 3500 and 4000, which seems down at lest 500 on last year -a similar in proportion as for the Orlando event. About 60% of those are users (in Europe at least). The unfortunate choice of dates (November 11th is a bank holiday in France and most like to be home early on Fridays) might be one of the causes explaining this audience drop. We also think budgets are tights and events drag less attendee nowadays.

Going on about numbers, we heard some vendors commenting on the number of events: in Europe, Gartner will hold a spring and a fall Symposium, the new Data Centre Conference that will take place in Amsterdam in 2 weeks and other specialists events. Would that symposium frenzy be a good illustration of the law of diminishing returns? This would mean a logic of more events, less attendees for each and decreased ROI for sponsors. BTW, that gala party was quite useful to pickup the exhibitors’ mood (those rich enough to buy stands and vendor sessions) which was quite bleak. After a few glasses of Moet champaign, most of them confessed on being disappointed by the poor audience showing up on the ITxpo show-floor.

As a side comment on Stephen from KGC who was probably high when he accused Gartner to have moved the Symposium dates to kill KGC’s event (read Gartner Disconnects KCG Connects). We agree with SGV that they had to cancel either due to low audience or careless planning this on a Sunday. Or both. But that business of blaming Gartner for having to cancel, even if they’re now becoming a monopoly… tsss…. Side note two: the reason for starting on a Tuesday was that the Palais des Festivals was booked till the WE, which also had a knock-on effect on the show-floor build –ITxpo was not accessible during Tuesday’s lunch.

Bottom line: we recommend vendors to use this year's Symposium shortfalls to negotiate a rebate for 2006.

To be continued tomorrow...

Strategically monopolistic

Joe (Guralnick) seems to have woken up this week, as he did commit quite a few Gartner Watch posts. In Good debate on price hikes he relates a discussion with Fred Abott from Valley View Ventures on whether Gartner is a monopoly who has freedom to push its prices up. Fred seems to think Gartner is up for sale. ARmadgeddon’s long stated opinion is that Gartner is indeed increasing prices (see (Distant) Echoes from the Barcelona Symposium) and that, while we agree with Fred that their competition is diverse and morphing, Gartner with about 40-50% share is behaving as a natural monopoly. For more on this subject, see Gartner, a natural monopoly (Analyst Equity and Gartner Watch and also Revealed: why Gartner took over META!!!.
Tipping in some more kerosene, Silicon Valley Guy tipped us with the following: “In the October 27th Q3FY05 earnings call, Gartner CEO Gene Hall told the Wall Street analysts that on November 1, Gartner will be doing an across-the-board price increase of 3% to 5%.”

SVG also wrote us about the new industries research & advisory services, which he presents as a “new premium fee-based research services from its core research offering as well as the old GartnerG2 and META standard research. So what use to be included in the core syndicated research, now people have to pay additional to obtain. The premium services run from $25k to $35k. What is really outrageous is that to get access to the Industries services, a client also has to have core research seat, so the real price of Industries access is $35k to $55k depending on your discount for a core Advisory Seat.”
The information we have received so far is that the Industries RAS will be separate deliverables though very similar in form but more business issues focused. However SVG points out an interesting “improvement” over G2: the inclusion of tragic magic quadrants and Marketscopes (a dumbed down version with just a 1 to 5 rating) which of course should prompt vendors to subscribe to get what is said on them and buy reprints. We’ll reserve our judgment on Gartner Industries but based on initial conversations our expectations are low.

The logical outcome of monopolistic position is usually arrogance and fall. Research is commoditizing and Gartner has to make it more relevant to IT buyers. Unfortunately we doubt of their ability to move up the value chain to compete with BCG, system integrators and others. Finally, we know their consulting business is not getting traction (see Gartner ≠ Consulting?).
With all this in mind, it would be nice to get an update on Gartner’s strategy but it is interesting to note that the Borg hasn’t bothered to organise a meeting for the AR profession during the Cannes Symposium…

Back in the high life again?

Stephen England's just written his balance sheet of Gartner's Symposium. His verdict: "Last week saw a significant milestone for the tech industry – the return of one of the most reliable bellwethers in the business -- Gartner’s annual Fall Symposium -- to the state it was in before the bubble popping tech crash and the dreadful events of September 11th 2001."

Okay, with a name like ARmadgeddon no-one expects this blog to be optimisitic. But we think Stephen has sniffed one yellow rose too many. He comments that "8,500 people attended the Orlando event (netting out 1,000 odd vendor attendees and a similar number of Gartner team members that’s 6,500 end user technology buyers or ETB’s)." That is a long way short of where Symposium was in 2000, when the conference center was packed solid. I seem to remember being told that there were well over 10,000 there that year.

But Stephen's estimate of the attendance this year also seems a little high to me. 6,500 attendees from end user organizations is 50% higher than the figure Gartner cited in the 'come back soon' packet given to departing firms that had exhibited at Orlando: and not all of those end users are end user buyers. Every year the ITxpo is filled with an increasing percentage of human locusts who seem to be there only for free pens, t-shirts and chicken wings. Indeed, his estimate of Gartner having 40% market share also seems high. My Gartner account manager claimed a much lower percentage.

Of course, since Stephen's biggest asset is a former Gartner analyst, it figures that he and his colleagues want to emphasise Gartner's leadership. But the reality is that Gartner's revenue is smaller now than it was at the peak of the boom; and that is remarkable considering that Gartner acquired META Group.

And that leads us to a rather different conclusion from Stephen: that Gartner's market share is probably lower than at the peak of the boom, and attendance at Symposium seems unlikely to return to the peak before the crash. Indeed, Gartner's recent choices, such as those to sell its custom research wing and to effectively cancel the first full day of the Symposium in Cannes, are signals that it expects hard times ahead.

Symposium Blog

Whether visiting the Gartner Symposium or not, make sure to have a look at the Symposium Blog. The analysis there is pretty dismal (looks like Dell and Microsoft purchased a sponsorship package), but you’ll find menus (we’re looking forward to the food in Cannes :-) and why Disney places toilets strategically. Oh, and yes it’s a moderated blog…

Gartner Disconnects KCG Connects

Last month I mentioned how Bill, wearing a Texan flag, hosted a day of discussion for analyst relations professionals attending Symposium in Florida. Gartner's CEO, Gene Hall, was the guest speaker - and did not have the best day of his life there. I've just heard that, thanks to Gartner, the KCG Connects event at the Symposium in Cannes has just been canceled.

KCG says that Gartner has suddenly moved the first full day to Tuesday from Monday, meaning that many people are delaying their arrival, and that a falling number of sign ups for their Sunday event makes it unprofitable for them to fly over to France.

We have to admit that even though it sounds very unlikely that a whole day of the conference was junked at the last minute, we don't think KCG could be making this up. Of course, Symposium always opens with an half day -- for registration and tutorials. And as far as we can see, the tutorial day in Cannes was always scheduled to be the Monday [in contrast, it was the Sunday last year]. Either way, it's certainly easier blame Gartner than to suggest that most Europeans think they have better plans for Sundays.

Vinnie shoots at Forrester!

Great post from Vinnie Mirchandani on Forrester in his blog [deal architect:] Forrester's Fortitude. He describes them as bold and taking risk on analysis (i.e. headline research). The SAP case (stock fell 10%) is scary.

What impact has Forrester on European AR professionals?
Headline research, or bold claims with little substanciation, is difficult to deal with for AR people, as getting a retractation from an analyst is difficult. That is unless of course the relationship with the analyst is good and makes him/her more predictable. On the the other hand, Forrester's presence in Europe is far from what it should be (they don't cover hardware for instance).

Does size implies relevance?

Dan Scholler argues in his blog (Dan Sholler's Musings) against the Valley View Ventures paper “IT Industry Analysis Myths: Business of IT Industry Analysis Revealed”.

One of the interesting points of the discussion (read the comments from James Governor and Fred Abott) is whether size allows the Gartner Borg to be more relevant by “leverage[ing] the conversations with hundreds of clients in a short period of time, whereas an independent analyst is unlikely to be able to access the same volume of information"”?

We’ve commented numerous times before that the Borg is acutely afflicted by siloisation: despite Andy’s comments, we maintain that Gartner analysts do not have incentives to work with consultants (this conversation may be sooo yesterday anyway) but also that the information exchange within Gartner is poor, both across services silos and also between DQ and RAS analysts. This would indeed negate Dan’s point.

The issues caused by that siloisation are chiefly about interaction inconsistency (both in content and quality) for Gartner clients. We heard several user and vendor customers complaining about getting different analysts for each engagement, and of very variable quality.

There is however hope as the Borg management seems to be aware of the problem. We advise Gartner clients to remain vigilant on this point and to assess regularly their progress.

Techra and cousins: pot noodles for AR dinners

We (and about everyone else it seems) got pinged by Jim Zimmermann from Techra, a new venture he founded after creating and selling Analyst Views to Bitpipe (subsequently assimilated by TechTarget and then resold to Northern Light -do you still follow the plot?).

Both sites are pretty similar, and if one add Tekrati the market is quite crowded. All those aim to aggregate analyst content and make it easier for AR managers to trawl through research (probably the most exciting part of AR?), while offering analyst firms directory. They differentiate on the added value services: Tekrati offers an analyst profiles database while Techra and Analyst view create "consensus reports" amalgamating the opinion of several analysts in document.

Our opinion is that they all help AR newbies by providing directories and ready made information -quite useful for briefing books or to know who to brief. Established AR practices within large firms will often be better resourced though.
The consensus reports is an interesting option to create a report compare and contrast the opinions of the various firms on a given subject for $25k (or 12-18k for a brief).

Gartner ≠ Consulting ?

ARpro posted earlier on Gartner selling their custom research department: Gartner exits Custom Research ?!? Some more thoughts on this: as we mentioned earlier (Resistance is futile, All resistance is futile, Germany, Gartner, a natural monopoly), the Borg already killed META Group Consulting (MGC). We also heard at the KGC Connect sessions in Orlando (a nice AR gathering at $500 a pop!) that Bill thinks Gene Hall is planning to spin off the consulting business within 6-9 months.

Killing the golden goose?

This move is quite surprising as MGC was boasting a double digit growth and a good utilisation rate and we'd love to hear what the securities analysts are saying about Gartner's strategy.
Conversely, it seems like a nice opportunity for IDC and META’s illegitimate offspring but also independent analysts if ever they can coalesce to balance the market or turn open-source.

What’s the Borg strategy then?

Well, so it seems determined to keep the prices high at the risk of alienating key vendors, keep making good money from their events business. Would this mean a deliberate attempt to curb the influence of vendors? If that was the case, they plan may be to increase the perceived independence and therefore justifying the premium they can charge? Will the market accept that high-integrity means high-value?

Just don't take their fashion tips

It's the first day of Gartner's Symposium today. Having unpacked my bags here at DisneyWorld, I picked my way through the crowds of little Snow Whites and Peter Pans to the Coronado's convention center, where Bill and his group were organising a networking event for almost 60 seasoned [over-seasoned?] analyst relations professionals.

Those of us who love Bill know that he has a lot to share. So, it was a bit of surprise to be at an event where he let other people do the talking: AR pro's and people from the analyst companies. It was a great day.

Needless to say, Bill still found a way to make an impact by dressing Stephen, Chris, Niwas and himself in these matching shirts made of the Texan flag.

Let's hope they have enough to wear them for the whole week. It will certainly brighten the week up!

Reacting to an analyst attack

Interesting points from Duncan on How to react to negative reports: [Analyst Equity] “When analysts attack”.

We’d add two points to his analysis:

1. Vendors need not to over-react to negative reports; it has often unwanted consequences like the analysts sniffing a sweet-spot.


2. A fair criticism is often not a bad thing, as it positions the research note as truly independent. If you want marketing brochures, write them yourselves.

He however assumes one’s always dealing with rational, unbiased and honest analysts. Quite unfortunately, this is not always the case, as we’ve seen analysts verging on the sanity engage in passionate and irrational arguments with vendors for the sake of having an intellectual contest.
We believe those are actually a small minority, but most vendors quite rightly do not react well to this treatment. Seeing an analyst spitting out a competitor’s FUD year after year probably also falls into this category.
In those extreme cases, we suggest escalating to management level, to cut funding (at least temporarily) and ignore deliberately the analyst for a while…

Gartner exits Custom Research ?!?

Now it gets interesting. Duncan has pointed out that Gartner has sold its Custom Research business.

My first thought was: how come research is no longer a core competency for research companies. It's not like Gartner needs the money, is it?

But then I started wondering about the money side. The sale involves an eight year outsourcing contract from Gartner to keep on running the IT panel surveys. So this makes GCR a really valuable asset.

I'll leave Joe to run the numbers, but I can't see how this works out to be good news for Gartner. Gartner is stepping out of customer research just at the time when Forrester is moving into it (if I am to believe my account manager there). And it's giving a guaranteed income, against which it can borrow, to an upstart analyst firm that intends to buy other analyst firms, more than double in size, and becomne a full-service analyst firm.

It's just really, really strange.

SPAR, not Spas, in Orlando

In a few days the AR community will be gathering in Orlando for Gartner's Symposium. Of course, all our colleagues think we have a week of pampered fun in our DisneyWorld resort. Sadly we are all too busy to take advantage of the hotel spa. Our only trip to the Magic Kingdom will be to bring back lost executives.

So while there's no spa time, there will be SPAR time. Those of us in the Valley who want to establish a society for professional analyst relations people are hoping to expand our support on our annual pilgrimage to the Atlantic. For those of you who haven't read earlier posts on this topic, the plan is NOT that we combine to pressurize the analyst houses. Instead, we want to network, develop professionally and promote analyst relations as a real profession. There's some flexibility: not only vendors, but also external service providers like freelancers and PR agencies and those who are in-between jobs.

Progress has been slow. Out of nine action items from the first SPAR meeting, nothing happened on most of them, because no-one had the time to volunteer: Everyone is really busy. The majority of us have corporate managers to deal with, and that limits our spare time. A few external service providers really have time and energy to support something like SPAR -- Tom, Bill, Duncan and Barbara -- but they are excluded for some rather spurious reasons (but they'll be hanging around at the edges, and Duncan is even flying over from London).

At Symposium we'll be seeing what progress has been made, and discussing how we can communicate outside meetings with blogs, online communities, LinkedIn, newsletters and so on -- especially because AR is a big global community, and not everyone can come to a central location.

In November, we'll have a meeting (probably at SAP) which will have a lot to review: charters, goals, structure, some common projects like a survey and directory -- and a series of how-to discussions on case studies. It's a busy agenda, so I remain a little unsure about whether we have enought support yet to make everything happen. However, it's certainly a move in the right direction.

[Analyst insight]: John Collin's blog

David (Rossiter from Sunesis) points to Jon Collin’s blog: The Days Are Just Packed. We learn the interesting things on the drudgery analyst life, but to the difference of ranting Andy (Bitterer, not to be confused with randy Andy or even with Andy Butler), this is with a good dose of English humour. A most needed quality indeed, as we learn of the London mishaps, the gazpacho and thumb incident and bumper episode …
We also learn he’s writing book on Rush and it all makes up for an entertaining read in the end…

While we hope John will keep posting frequently, the departure of Dale Vile from Quocirca may keep him busy on other fronts?

Hiring Gartner analysts to increase business intelligence?

From an Onymous reader: Hyperion Hires Former Gartner VP As Chief Strategy Officer. This business intelligence software company hired Howard Dresner, ex Gartner Research Fellows (now only 12 left...) and "led the formation of Gartner's business intelligence research practice". Hyperion must have liked what they got from Gartner: a happy soon-ex-customer?

Who will be next to gain from the brain drain?

Microsoft hires from Gartner, right, left and centre!

We don’t know if it’s a policy or a trend, but several Borg analysts have defected for the software giant: Earl Perkins (ex-META, security research?), Ashim Pal (ditto and to do AR) and Michael Haines (Americas channel strategy).
ARmadgeddon wishes them good luck: advising is often easier than doing…

Devious minds would suggest that MSFT’s position in the Magic Quadrants is going to improve.  On the other side, they are still using several PR agencies to execute their AR tactics, not getting a lot of kudos from the analysts anyhow…

Gartner hires new SVP

Tip from Sillicon Valley Guy:  Gartner submitted a SEC form 4 granting options to a new officer, Kendall Davis, SVP of Strategy, Marketing & Business Development. No press release and Davis not listed on the management page yet...

Gobernator attack: redux

Looks like the hunting season has started and the Redmonks are after the Borg:
A Gartner Analyst walks into a bar...

The post is about Gartner making bold statements (like "UNIX is dead") and "fall into the trap of binary thinking".

James, like many other bloggers, think conversation will outflank conventional anlayst firms:
Governor attack! (check the comments) Alike the JBoss model against the IBM/Microsoft one?